How COVID-19 has Impacted the NY Agriculture Industry
In early March of this year, Bill Zittel was hard at work in his greenhouses in Eden, New York — pacing the aisles, inspecting his crops and checking in with employees. With no overbearing fears of walking within six feet of another person or shaking a gloveless hand, Zittel continued doing all the things necessary to keep the farm in order.
Five hours away in Hudson, New York, Freya Dobson was engaging in similar work at Hudson Hemp, a regenerative farm dedicated to the well being of the planet and all of its inhabitants.
As the Brand Director for the company, Dobson documented the daily events of the farm for social media. Unaware of the global events that would follow in the coming weeks, she and the rest of the Hudson Hemp team carried on preparing for the new growing season without a second thought.
Neither Zittel nor Dobson anticipated just how drastically their lives would change at the hands of COVID-19.
Coronavirus disease has impacted almost every industry globally, and agriculture is no exception. Iowa alone, which is the country’s second-largest agricultural state, is headed to reach $6.64 billion in annual damages according to Iowa State University. Facility closures and nation-wide lockdowns have left supply chains in shambles.
These disruptions also occur in retail stores. Many stores have shifted to online ordering and curbside pickup in an effort to remain open.
This shifted style combined with more precautions due to rising health concerns has led many retailers to cancel purchase orders from farms. These cancellations put undue stress onto farms and have caused the farming industry to see a sharp decline in a short period of time.
Of course, these new circumstances aren’t solely impacting the lives of farmers — this is a global issue that, if left ignored, could leave the world with major crop shortages. Local markets will have a limited supply of fruits to buy. The dairy section in supermarkets will have rows of empty shelves. The fewer people that are outside and purchasing products, the less funding the agriculture industry will have to transport and maintain their goods.
According to the U.S. Bureau of Labor Statistics, America’s unemployment rate has officially surpassed 2009’s Great Recession percentages, coming in at 14% nationally. The more money that farmers lose, the more that percentage rises — which means a lot more than a “Quarantined Lockdown” in the grand scheme of things. We’d be looking at a production halt in the American food industry.
Bill Zittel from Amos Zittel and Sons, Inc. and Melanie Dobson from Hudson Hemp are two examples of farmers in NY State who are trying their best to navigate this unprecedented time and keep their businesses afloat.
Despite both farms being considered essential services, they are still facing financial hardships, workforce struggles and day-to-day obstacles. It’s clear that Zittel and Dobson have been transported into unfamiliar territory.
Zittel weighed in on the specifics of being an agricultural worker during this time while providing insight into the farm and its history.
According to their website, the Zittels “have been farming in Eden Valley since 1897.” Clearly, the farm has been in the family for a long time… and this isn’t too different for a lot of other farmers across the U.S.
Farms are passed down from generation to generation, built up as the years go by.
In Zittel’s case, the family started with one focus and has now expanded to three separate ventures: “Fresh market vegetable production, greenhouse production and a retail market DBA Zittel’s Country Market.”
Amos Zittel and Sons, Inc. produces vegetables ranging from varieties of lettuce to corn, which is their most important crop on a national level. AgAmerica says, “ Over 90 million acres of corn are grown for feed, industrial products, and food and beverage products like cereal, alcohol, and sweeteners.”
According to the United States Department of Agriculture, corn produces about 14 billion bushels every year. At $3.82 for one bushel, this values the corn industry at approximately $52 billion — that’s a little under 40% of the total revenue that agriculture contributes to the U.S. economy.
With revenues like this, it’s clear why they’ve been deemed an essential service and permitted to continue operations during the pandemic.
Co-Founder and Brand Director, Freya Dobson, spoke on behalf of Hudson Hemp.
Hudson Hemp was founded in 2017 and is comprised of Old Mud Creek Farm and Stone House Farm. Since Stone House Farm produces crops besides hemp, they were also deemed essential and can fully run all operations at both farm locations.
According to their website, Hudson Hemp practices regenerative agricultural techniques “that support soil, life and the planet — going beyond sustainability to actually replenish ecosystems, nurture biodiversity and sequester carbon.”
Hudson Hemp primarily produces hemp for wholesale to other companies but also does direct to consumer CBD oil sales. Both farms are struggling with their financial future.
With a slight grimace on his face, Bill Zittel explained, “If we don’t have sales for our finished crop of flowers, we won’t have the income to pay our labor.”
Travel bans and tightened borders due to COVID-19 could deprive Amos Zittel and Sons, Inc. of their much-needed workforce, and cancellations of orders could lead to a lack of funds to pay them if they were able to come at all.
Hudson Hemp also had issues with cancellations of orders, which led to monetary hardship.
“In mid-march, we had to furlough a lot of our staff because clients pulled out of purchase orders. As a result, the staff that remains on site have taken on other duties than their initial jobs entailed.” Freya Dobson of Hudson Hemp said solemnly.
Fortunately, neither farm has had to let go of employees due to health concerns, but this does not mean they are fully staffed.
As Dobson explained, Hudson Hemp had to furlough many of their workers and is now increasing the workload of their remaining employees.
Zittel stated that “No one has been let go and there are no health concerns or signs of the virus, but some employees are choosing not to work so as to not expose themselves or their families.”
Zittel also described the new protocols enacted to try and combat health concerns.
He said, “For those working, we are keeping them a safe distance apart and have handwashing stations all over. We also enact all the social distancing protocols, have specific instructions to keep everyone on task and properly spaced, and we are trying to keep our labor camp more spread out.”
When asked about the safety protocols enacted at Hudson Hemp, Dobson referenced the Facilities Protocol document that was sent out to all of Hudson Hemp’s employees.
Even though both farms gave their best effort to keep everything as normal as possible, many clients still have their concerns and have canceled their orders. These cancellations have put a financial strain on both farms and added stress for the employees.
When asked about how the business had been impacted, Zittel sighed and laid it out on the table.
“We struggle mostly with the uncertainty as to whether we can sell our finished produce crop, which is valued at about $1 million.”
He then took a deep breath and continued on saying, “We have lost about $100,000 in sales already due to canceled orders.”
The question about cancellations seemed to hit a soft spot with Dobson as she described why the cancellations were concerning.
“Our wholesale business was impacted due to the outbreak. A few clients who had signed contracts with us pulled out of their purchase orders.”
With most of their money being made from selling wholesale, Hudson Hemp feared for the worst.
“Our biggest concerns are that the CBD market will shift so drastically that we will not have a viable wholesale market process to distribute to.”
Despite the lack of a wholesale market, Hudson Hemp is staying busy where they can. “We continue to run extraction every day. Having stock distillate is much more lucrative than having a flower.” Dobson also stated that their direct to consumer market has experienced a surge in online sales since the beginning of the outbreak.
When asked if there was anything else he would like to share, Zittel shared his hopes for the future of time spent in this pandemic.
“I am hoping that by May, people will want to enjoy plants in their yards and have the freedom to move.”
He continued on to say, “I am also hoping that fresh market vegetables will be seen as safe and that we will be better off knowing that the food was produced.”
Dobson shared similar hopes for the sale of their products, but also explained how CBD products could be beneficial during these crazy times.
“People are suffering from stress, anxiety, and insomnia (among other things) during this time. We are noticing a lot of people looking for alternatives to western medicine and leaning into CBD and other plant-based medicines.”
Zittel and Dobson are both unsure of what the future will bring, but try to remain focused on the present and solve the problems they can instead of worrying too much about those that they cannot.
Joel Dejong, an Agronomist at Iowa State University, gave input on the specific economics of the agriculture industry. DeJong explained how and why many farmers are being impacted nationwide and referenced his interview with KTIV.
He explained the impact in both grain markets and the meat industry. Relative to the grain markets, DeJong suggested that during early spring, there is usually a gain in the grain markets but as of yet, this has not been the case.
“We’re taking a look at the potential of closing some packing plants. And of course, we don’t have the ability to sell some of that livestock, we might reduce the amounts that are on feed, which will reduce feed demand,” said DeJong.
He continued to describe how the meat industry will see a decline because workers cannot be close to each other, which limits the amount of work that can be done.
DeJong also referred to a research report written by scientists at Iowa State University The Impact of COVID-19 on Iowa’s Corn, Soybean, Ethanol, Pork, and Beef Sectors.
The report (written in April 2020) states in its executive summary “we estimate the COVID-19 outbreak’s revenue impacts on some of Iowa’s largest agricultural industries. We estimate overall annual damage of roughly $788 million for corn, $213 million for soybean, over $2.5 billion for ethanol production losses and $347 million in losses due to falling ethanol prices, $658 million for fed cattle, $34 million for calves and feeder cattle, and $2.1 billion for hogs.”
The report also notes that “As more data become available and as the pandemic evolves, these estimates will certainly change, but for now they represent our best assessment of the impact on these industries.”
The Food and Agriculture Organization of the United Nations has released a Q&A on the COVID-19 pandemic and its impact on food and agriculture.
The page consists of nine questions that the organization deemed most important for people to know regarding their food concerns. The answers to the various questions are generalized towards the entire world in an effort to provide adequate information to anyone who might visit the page.
Many of the predictions made by the UN have proven to be true as the pandemic has grown.
“We risk a looming food crisis unless measures are taken fast to protect the most vulnerable, keep global food supply chains alive, and mitigate the pandemic’s impacts across the food system.”
The food chain in the United States has been disrupted because of social distancing practices, and some people not feeling comfortable going into work because they are afraid of getting sick.
Farms nationwide are struggling to keep on schedule with their crops due to a lack of labor, and tighter restrictions on shipping prevent certain foods from being shipped around the country and globe.
Additionally, these restrictions of movement and aversion behaviors by workers impede food processors from processing. As processors handle the vast majority of agricultural products, without them food can’t go from farms to traditional grocery stores.
These restrictions and lack of processors have caused shortages in grocery stores, especially as people are stockpiling foods in their homes.
The fourth question on the page is “How will the pandemic affect food demand?” and as many people have witnessed, it caused a drastic increase.
The answer section compared the current situation to the 2008 financial crisis and described how different they were.
“The 2008 financial crisis showed us what can happen when reduced income uncertainty makes people spend less and result in shrinking demand. Sales Declined. So did production.”
“At the onset of the COVID-19 outbreak, there has been a significant increase in demand.”
This increase in demand can be attributed to multiple factors like the fear of exposure to the virus so people make fewer and fewer trips to the store and purchase larger quantities of food each time they go. Another fear factor is simply the fear of the unknown. This global pandemic is unlike anything many people have experienced before, so they do not know how to act/react in order to survive.
These fear factors lead to “the tragedy of the commons” throughout stores.
Written about in 1833 by the British economist William Forster Lloyd the tragedy of the commons is a situation in a shared-resource system where individual users, acting independently according to their own self-interest, behave contrary to the common good of all users by depleting or spoiling the shared resource through their collective action.
One very recent example of this is the current shortage of toilet paper. When fear rose with the increase in COVID-19 cases, and talks of in house quarantines arose, people began to prepare.
Many began to stockpile essential items, like toilet paper. As people began to see less and less on the shelves, fear rose as they thought they would not have enough for themselves and more people purchased more toilet paper, essentially creating a run on the item.
This led to stores being sold out as suppliers could not keep up with the demand, and with processing and shipping disruptions, restocking stores is difficult. These runs also happen with different food items which put further stress on the supply chain globally.
The UN predicts that food prices will fluctuate short term, with slight increases in some markets due to “local logistical problems” but should go down in the next few months. This decrease in price is “a major concern” for rural farmers and the agricultural sector as some are facing financial struggles and will have trouble staying afloat financially.
The $2 trillion Senate Coronavirus Bill passed in the US allocates as much as $23.5 billion for farmers and allows Agriculture Secretary Sonny Perdue to direct it where he sees fit.
We have yet to hear from either Zittel or Dobson about whether or not they have received any funds from the Coronavirus Bill.
On a global level, agricultural hurdles will exponentially increase undernourishment rates in dozens of countries. The Food and Agricultural Organization of the United Nations maintains that as transportation of crops becomes more and more difficult, import-dependent nations will experience spikes of more than 8% in undernourishment. It’s evident that failing to prioritize farming and agricultural supply chains during this time will have a far more severe impact than simply not having enough grapes in a local Whole Foods.
The Organization for Economic Co-operation and Development (OECD) is forecasting the total economic growth of the world to decrease from 2.9% to 2.4% due to the pandemic… possibly even to 1.5% if the virus persists.
These funds can be used to fulfill the Food and Agriculture Organization of the United Nations’ main recommendations to mitigate the risks of the pandemic on food security and nutrition.
These recommendations include “keeping international trade open and take measures to protect their food supply chain (from obtaining inputs such as seeds to assuring smallholder farmers have access to markets to sell their produce), focus on the needs of the most vulnerable and scale up social protection programs including cash transfers, keep domestic food supply value chains alive and functioning, taking all necessary precautions, seeds and planting materials must continue to flow to smallholders; animal feed to livestock breeders; and aquaculture inputs to fish farmers, and maintain agricultural activities.”
Based on interviews with Zittel and Dobson, it seems that many of the predictions made by the Food and Agriculture Organization of the United Nations have proven to be true. However, one factor not mentioned in the Q&A page is the fear factor.
This fear factor has negatively impacted both Amos Zittel and Sons, Inc. and Hudson Hemp. As people fear disruptions in the supply chain or the potential inability to sell products, they have pulled out of contracts and purchase orders causing financial strain for both businesses.
The COVID-19 pandemic and resulting worldwide quarantines have caused fear to settle in, and the disruption of supply chains and markets globally. These disruptions affect some more than others with farmers being close to the top of the list.
Both Zittel and Dobson are hoping to get out of these strange times as unscathed as possible, but like the rest of the world, neither of them know exactly what the future holds.